Results of mBank Group Q1 2017 Promising start to the year with - PowerPoint PPT Presentation

Results of mBank Group Q1 2017 Promising start to the year with strong operating results Management Board of mBank S.A. Investor Presentation April 27, 2017

Key highlights of Q1 2017 Core income of PLN 998.6 M Strong total revenues close to historical heights exceeding PLN 1.08 B • NII at PLN 749.0 M (+10.7% YoY), on improved margins Profit & Loss • NFC at PLN 249.6 M (+17.9% YoY), Selective volume growth on rising customer business • Gross loans at PLN 84.5 B Solid efficiency maintained (-0.1% QoQ, +4.4% YoY) 1 • Cost/Income ratio at 53.4% • Customer deposits at PLN 88.7 B Volumes (-2.8% QoQ, +8.7% YoY) 1 Sound deposit base Focus on higher margin lending • Loan-to-Deposit ratio at 92.1% • Mortgage loan sales at PLN 0.8 B in Q1/17 (+12% YoY); non-mortgage Capital ratios well above loan sales at PLN 1.8 B (+34% YoY) Capital & regulatory requirements • CET 1 Ratio at 18.8%/22.1% 2 Liquidity Strengthening the position as • Total Capital Ratio at 21.6%/25.4% 2 mobile and transactional bank • Enhanced mobile application and Diversification of funding • New issue under EMTN programme new mCompanyNet platform Business • Launch of mBank’s FinTech fund development Accelerating client acquisition Net Profit of PLN 218.8 M, • 5,447 thou. retail clients (+410 -25.2% compared to Q4/16 thou. YoY) and 21,235 corporate clients (+1,243 YoY) 1 Volume dynamics presented excl. reverse repo / buy-sell-back transactions and repo transactions, respectively; 2 Stand-alone capital ratios; Investor Presentation – Q1 2017 |2

Agenda Summary of Q1/17 in mBank Group Key Financials Client acquisition and Market shares Development of retail and corporate new business Analysis of Q1/17 Results Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Capital and Liquidity Ratios Macroeconomic Update Appendix Additional Information: Selected Financial Data Detailed Results of Business Lines Investor Presentation – Q1 2017 |3

Summary of Q1/17 in mBank Group Key Financials: Profit and Loss Account Q1/16 Q4/16 Q1/17 PLN million change QoQ change YoY 676.4 753.3 749.0 Net interest income -0.6% +10.7% Net fee and commission income 211.7 250.6 249.6 -0.4% +17.9% 1,008.9 1,044.7 1,081.8 Total income +3.5% +7.2% -443.6 -442.7 -445.5 Total costs (excl. BFG) +0.6% +0.4% 1 Contributions to the BFG -37.1 -49.2 -132.2 --- --- -68.5 -39.7 -82.9 Loan Loss Provisions +109.0% +21.0% Operating profit 459.6 513.1 421.2 -17.9% -8.4% Taxes on the Group balance sheet items -57.3 -92.8 -91.3 -1.6% +59.3% 402.3 420.3 329.9 Profit before income tax -21.5% -18.0% Net profit 307.8 292.5 218.8 -25.2% -28.9% 2.29% 2.35% 2.42% Net Interest Margin (NIM) +0.07 p.p. +0.12 p.p. 2.66% 2.69% 2.77% NIM excl. CHF portfolio +0.08 p.p. +0.11 p.p. Cost/Income ratio 47.7% 47.1% 53.4% +6.3 p.p. +5.7 p.p. 0.35% 0.20% 0.41% Cost of Risk +0.21 p.p. +0.06 p.p. 10.1% 9.8% 6.8% Return on Equity (ROE) -3.0 p.p. -3.3 p.p. Return on Assets (ROA) 0.99% 0.88% 0.68% -0.20 p.p. -0.31 p.p. 1 Q4/16 contributions include additional payment to the Bank Guarantee Fund related to the bankruptcy of Cooperative Bank in Nadarzyn of PLN 10.9 million; Q1/17 contributions consist of annual payment to the Resolution Fund of PLN 116.8 million and quarterly payment to the Deposit Guarantee Scheme of PLN 15.4 million; Investor Presentation – Q1 2017 |4

Summary of Q1/17 in mBank Group Key Financials: Balance Sheet PLN million Q1/16 Q4/16 Q1/17 change QoQ change YoY 123,268 133,744 130,488 Total assets -2.4% +5.9% Gross loans to customers 80,925 84,581 84,538 -0.1% +4.5% Retail client loans 46,511 48,950 48,338 -1.2% +3.9% Core corporate client loans 1 32,801 34,118 34,759 +1.9% +6.0% 81,134 91,418 88,744 Amounts due to customers -2.9% +9.4% Retail client deposits 47,835 53,495 53,829 +0.6% +12.5% Core corporate client deposits 1 31,771 35,783 32,080 -10.3% +1.0% 12,627 13,051 13,338 Total equity +2.2% +5.6% 96.1% 89.4% 92.1% Loan to Deposit ratio +2.6 p.p. -4.0 p.p. 5.8% 5.4% 5.2% NPL ratio -0.2 p.p. -0.6 p.p. 58.6% 57.1% 59.4% Coverage ratio +2.3 p.p. +0.7 p.p. 16.2% 17.3% 18.8% Common Equity Tier 1 Ratio +1.5 p.p. +2.6 p.p. 19.0% 20.3% 21.6% Total Capital Ratio +1.3 p.p. +2.6 p.p. 1 Excluding reverse repo / buy-sell-back transactions for loans and repo transactions for deposits; Investor Presentation – Q1 2017 |5

Summary of Q1/17 in mBank Group Business Development: Client acquisition and Market shares Number of Retail Clients (thou.) Number of Corporate Clients +1,243 +410 +295 +99 21,235 20,940 20,695 5,447 20,220 19,992 5,348 5,250 5,146 5,037 2,103 2,123 2,149 296 2,138 2,152 275 250 234 216 910 877 893 842 866 6,067 6,770 5,987 5,883 5,896 4,181 4,241 4,046 4,123 3,979 12,559 12,750 11,944 12,199 12,362 03/16 06/16 09/16 12/16 03/17 03/16 06/16 09/16 12/16 03/17 Retail Banking PL mBank CZSK Orange Finance K1 K2 K3 Market shares in Retail Banking segment Market shares in Corporate Banking segment 10.1% 10.1% 10.0% 9.8% 9.8% 9.8% 6.6% 6.6% 6.5% 9.7% 6.5% 9.6% 6.5% 6.5% 6.5% 6.5% 6.5% 8.9% 6.1% 6.0% 6.0% 5.9% 5.8% 6.4% 6.3% 6.3% 6.3% 6.3% 6.3% 6.2% 6.2% 5.7% 6.1% 5.4% 5.4% 5.3% 03/15 06/15 09/15 12/15 03/16 06/16 09/16 12/16 03/17 03/15 06/15 09/15 12/15 03/16 06/16 09/16 12/16 03/17 Loans Deposits Loans Deposits Note: Corporate clients split: K1 – annual sales over PLN 500 M and non-banking financial institutions; K2 – annual sales PLN 30 M to PLN 500 M; K3 – annual sales below 30 M. Investor Presentation – Q1 2017 |6

Summary of Q1/17 in mBank Group Development of Retail and Corporate new business Sales of mortgage loans Sales of non-mortgage loans (PLN M, by quarter) (PLN M, by quarter) +12% +34% +14% +19% +19% +14% 1,801 798 1,725 759 713 1,560 702 691 1,514 156 9% 111 14% 133 1,344 121 110 228 71 9% 114 120 514 28% 9 436 33% 235 1% 9% 121 68 398 63 403 13 90 34 28% 382 12% 81 59 24% 173 607 76% 511 1,155 1,131 63% 473 1,041 998 382 63% 841 31% 224 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 mBank Hipoteczny Individuals Entrepreneurs mBank CZSK Individuals Entrepreneurs mBank CZSK Sales of corporate loans New leasing contracts (PLN M, by quarter) (PLN M, by quarter) +17% +12% -13% -13% +22% 2,496 2,298 2,167 1,129 2,100 1,066 1,027 1,011 1,845 916 560 928 624 777 299 K1 K2 1,357 1,191 1,258 1,163 1,134 K3 380 389 288 313 256 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Note: Corporate clients split: K1 – annual sales over PLN 500 M and non-banking financial institutions; K2 – annual sales PLN 30 M to PLN 500 M; K3 – annual sales below 30 M. Investor Presentation – Q1 2017 |7

Agenda Summary of Q1/17 in mBank Group Key Financials Client acquisition and Market shares Development of retail and corporate new business Analysis of Q1/17 Results Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Capital and Liquidity Ratios Macroeconomic Update Appendix Additional Information: Selected Financial Data Detailed Results of Business Lines Investor Presentation – Q1 2017 |8

Analysis of Q1/17 in mBank Group Development of Loans to Customers Loan growth focused on higher-margin products Development of Gross Loans and Advances to Customers (PLN M) +6.2% +6.0% +1.9% +4.5% -0.1% +4.3% 34,841 34,528 33,937 34,174 32,805 +2.0 % 81 62 84,581 84,538 132 57 84,199 83,862 4 80,925 1,457 1,360 1,552 2% 1,653 1,609 2% 34,466 34,118 34,759 33,805 32,801 34,174 34,841 41% 34,528 33,937 41% 32,805 03/16 06/16 09/16 12/16 03/17 Core loans to corporates Reverse repo transactions +3.9% +3.6% -1.2% +1.1 % 48,950 48,950 48,272 48,119 48,338 57% 48,272 48,338 57% 48,119 46,511 46,511 11,231 10,520 11,150 11,804 9,897 2,532 2,350 2,345 2,507 2,326 35,369 35,220 34,624 34,107 34,207 03/16 06/16 09/16 12/16 03/17 03/16 06/16 09/16 12/16 03/17 Individual clients +X.X% Excluding FX effect Corporate clients Mortgage loans: to Individuals to Microfirms Non-mortgage loans +X.X% Excluding Reverse repo / Public sector & Other receivables buy-sell-back transactions Investor Presentation – Q1 2017 |9

Analysis of Q1/17 in mBank Group Development of Deposits Intentional outflow of corporate term deposits, growth in current accounts Development of Amounts due to Customers (PLN M) +2.9% +1.0 % +9.4% -10.3% -2.9% +8.7% 37,383 -2.8 % 35,119 33,829 33,551 32,618 91,418 1,600 1,287 88,744 1,471 2,011 847 540 85,302 85,188 1,364 1% 81,134 731 624 681 35,783 1% 33,832 32,080 31,771 31,818 37,383 38% 33,551 33,829 35,119 40% 32,618 03/16 06/16 09/16 12/16 03/17 Core corporate deposits Repo transactions +12.5% +0.6% 53,495 53,829 61% 53,829 53,495 50,735 49,453 50,735 47,835 49,453 59% 47,835 14,651 15,381 15,237 14,349 14,272 38,114 39,178 35,104 35,498 33,563 03/16 06/16 09/16 12/16 03/17 03/16 06/16 09/16 12/16 03/17 Individual clients Corporate clients +X.X% Excluding Repo transactions Sight deposits Term deposits Public sector Investor Presentation – Q1 2017 |10